A review to design a secure, liveable income for all older Australians

Media Release - Friday 15th May 2015

Australian pensioners will find it difficult to accept the proposed changes to the pension assets test taper rate set out in the Federal Budget this week, without those changes being part of a broader, independent review of the retirement incomes space, said older Australians peak body COTA Australia.

COTA Chief Executive, Ian Yates, said that there are currently great inequities in the treatment of retirees which need to be addressed, and taking on pensioners, without looking at other areas, adds to those inequities.

COTA has for months been seeking an independent, comprehensive retirement incomes review that would seek to design retirement incomes policy that will:

Ensure that government policy enables all retirees to optimise their retirement incomes to produce higher living standards for them and at the same time reduce pressure on the age pension system;

Review the interactions of pension, superannuation, taxation, employment and aged care policies to ensure they are aligned and supportive of each other and not contradictory or unfair;

Ensure that policy settings produce an adequate income in retirement for all Australians in ways that are fair, sustainable and secure for the next four decades; and

Ensure all retirees in similar circumstances are treated equally by the tax and regulatory regimes.

"Australia faces a future in which the retirement incomes system becomes a huge part of the economy and Federal Budget," Mr Yates said. "We need to plan for that now by putting in place good policy that ensures our retirement system is sustainable, secure and fair for the long term.

"A combination of piecemeal tinkering in some areas and neglect in others by successive governments has resulted in policy misalignment, inequities between retirees in similar circumstances, waste of taxation revenue, and a failure of adequacy over the full period of retirement.

"For example, changing pension arrangements will impact on the funding of aged care which is moving to a more user-pays model, yet modelling has not been done to measure the extent of the impact of various pension and super policies on how much extra government will have to pay for aged care.

"A holistic retirement incomes review, taken out of the political arena and run independently with stakeholder buy-in, could deliver security and certainty to retirees and sustainability for government, with a real chance of a bi-partisan approach as an outcome."

"Not undertaking such a review is likely to jeopardise the Government's new pension proposal. Pensioners won't wear cuts to their income if they see much more wealthy retirees receiving higher levels of tax support, and a range of other anomalies left unresolved.

"We again urge the government to consider a review in the context of a fair, sustainable, long-term plan for an ageing population."

Mr Yates said a retirement incomes review was already supported by theBusiness Council of Australia, the Financial Services Council, Industry Super Australia, ACOSS, National Seniors Australia and other seniors groups, as well as having been recommended by the Financial System Inquiry and the Commission of Audit.

Media contact: Ian Yates 0418 835 439, Jemma Williams 0409 510 879.

COTA Australia is the peak policy development, advocacy and representation organisation for older Australians, representing COTAs in every State and Territory and through them over 500,000 older Australians.